Good morning and welcome to Europe Express.

EU’s fiscal rules are finally getting an upgrade (or at least a proposed one) today and we’ll bring you up to speed with what to expect, as per latest draft seen by the Financial Times.

We’ll also hear from Ireland, where Elon Musk’s recent firing spree at Twitter is adding to a worrying trend for the small open economy that is quite dependent on American tech companies.

The FT has a story this morning about Uzbekistan’s efforts to persuade the EU to lift sanctions on Alisher Usmanov, one of 26 Russians put on travel bans and asset freeze lists in the immediate days following Vladimir Putin’s full-scale invasion of Ukraine.

And with a general strike today in Belgium, we do hope you can avoid travel or commuting to work.

Tricky overhaul

The European Commission’s proposals on how to overhaul the bloc’s unloved fiscal rules land today in Brussels — heavily delayed, sparse on detail, and facing a very difficult ride among member states, writes Sam Fleming in Brussels.

Few question the need to reform the EU’s arcane Stability and Growth Pact, which has over the years become evermore complex, patchily enforced and poorly understood. As the commission’s draft communication puts it with admirable understatement, “not all instruments and procedures have stood the test of time”. 

But it will be an arduous task converting universal discontent about the fiscal rules into any kind of consensus about what a revised regime should actually look like.

The idea behind the draft proposals, seen by the FT, is to allow member states to agree more realistic debt-reduction paths with Brussels, while creating extra space for public investment. Enforcement would be tightened, with a stricter regime for countries that face “substantial” public debt challenges.

But there is already particular deep scepticism in Germany about what the commission is proposing.

Christian Lindner, the country’s finance minister, told the FT last month that it would be “unwise” for countries to be able to strike individual deals on their public finances following bilateral negotiations with the commission. The pact’s credibility stemmed from the fact that “the rules have to be implemented by everybody, in the same way”, he added.

His objections are, in other words, not about certain details in the commission proposals, but with the entire concept.

Concerns among other member states may be less fundamental, but that doesn’t mean they aren’t real. The aim of increasing national ownership through country-specific plans has support in many capitals, but it will be fiendishly difficult agreeing on the processes, oversight and enforcement mechanisms that will be required.

And today’s communication is more a high-level concept paper than a fleshed-out set of proposals, with much of the legal detail yet to be spelt out.

There is talk of seeking a consensus on the shape of the new regime in a March summit next year, but that is a short timescale given the complexity of the subject matter. While the fiscal rules are suspended in the wake of the Covid-19 crisis, they are due to kick back into force in 2024, and there is little or no chance that new legislation could be ready by then.

The repeated delays ahead of today’s launch have left a “high level of frustration” among eurogroup members, according to one senior diplomatic official.

“The commission has delayed and postponed and is now handily passing the hot potato on to the council,” complained another European diplomat.

“Rather than bringing forward an idea that member states can coalesce around, the lack of detail will only exacerbate existing faultlines when unity is required.” 

Chart du jour: America First

The US and Europe are by far the biggest emitters of CO₂ throughout history. But diverting attention from the priorities of today to compensation for injustices in the past will lead not to action but to endless and unproductive disputes, writes Martin Wolf.

Ireland’s tech wreck

Ireland is trying to put a brave face on it, but there’s no denying the alarm at the looming prospect of mass lay-offs at global tech companies including Meta, Twitter, Intel and Stripe, writes Jude Webber in Dublin.

So many US companies have their European headquarters in Dublin’s Docklands that the country has been nicknamed “Silicon Valley Europe”. Tech groups are not only a pillar of the economy, delivering growth even during the Covid-19 downturn, they are big employers (37,000 staff) — and even bigger taxpayers.

Paschal Donohoe, Ireland’s finance minister, said his country was “as exposed . . . as any other small, open economy that has a large digital or service dimension to it”. But few of Ireland’s peers are quite so vulnerable: tech accounts for 7 per cent of all jobs in Ireland and 12 per cent of income tax receipts.

Irish officials do not yet know precisely how many jobs are for the chop and Leo Varadkar, who is trade and employment minister as well as deputy prime minister, stressed that “no company has given any indication that it is considering closing its Irish base”.

He said the government would help affected employees seeking new jobs and highlighted a “strong pipeline of new investments” in tech and other sectors with “many positive announcements in the coming months”.

But in Brussels on Monday, Donohoe acknowledged that recession was a risk. “There’s no doubt that this is going to hit Ireland,” echoed Tommy Fanning, head of strategic planning at state investment promotion agency IDA.

Buckle up. Here’s a quick rundown of expected job cuts:

• Social media group Meta employs 3,000 staff and some 6,000 contractors in Ireland; unspecified number of job cuts expected.

• Twitter swingeing job cuts under new boss Elon Musk are expected to cost as many as 250 of its 520 staff in Ireland their jobs.

• Chipmaker Intel has announced some as-yet-to-be-quantified redundancies.

• Stripe, the Irish-founded fintech group which employs some 500-600 staff in Dublin, had announced a 14 per cent reduction in jobs worldwide after saying it had “overhired for the world we’re in”.

What to watch today

1. European Commission puts forward proposals for Stability and Growth Pact reform and Ukraine financing

2. Commission chief Ursula von der Leyen speaks at the European parliament in Brussels

Notable, Quotable

• Slower bonfire: UK government officials are slowing down plans to review or repeal all EU laws on the UK statute book by the end of 2023, after discovering 1,400 additional pieces of legislation.

• ‘Long day in hell’: A female marine and two other Ukrainian prisoners of war captured during the fight for the city of Mariupol in the early months of the conflict have told their stories to the FT.